Faced with the war in Ukraine, the EU decided to impose economic sanctions against Russia. Thus, he, among other things, excluded seven Russian banks from Swift, this financial system that allows banks to exchange internationally. A direct consequence on the Cote d’Azur, especially on real estate and not only on the oligarchs.
Cyril Messika, President of the Housing Observatory, comments: “Russian buyers can no longer pay rent due to this lockdown. This territory is a desirable place for the Russian community, and not just for billionaires. We are suffering from this situation, not being able to do anything. We must react quickly because this is not anecdotal. He adds: “The urgency comes from the additional material costs due to the boycotts, which increase bills by more than 30%. We are facing a real problem. »
Deadlines that go “from 4-6 weeks to 5-4 months”
Indeed, in order to increase pressure and end the war, the European Union stepped up its measures against Russia. On March 15, among other things, she introduced the “fourth train”, including restrictions on the trade in iron, steel and luxury goods. Here again real estate on the Cote d’Azur suffers.
Patrick Moulard, President of the Federation of Buildings and Public Works (BTP) of the Alpes-Maritimes, develops: “There is an additional cost to all raw materials and this has a direct impact on structures. We have gone from a period of 4-6 weeks to 4-5 months for the production of an electrical panel. Today, outgoing projects can no longer be done, there are delays in construction. Not all customers agree to pay these additional costs. We then expect a real slowdown in our activities, because we know that there will be no changes for several months, even several years. »
For him, the situation is “no way out.” “Even if we want to do otherwise, there are limits. Especially in our territory, which is constrained by a special regulation on seismic resistance of construction. This forces us to use a lot more steel compared to other territories. Before the crisis in Ukraine, a ton cost 600 euros, today it is 1,800 euros. How can we look into the future with the price multiplied by three and changing almost from day to day? »
Russians can no longer buy, but Ukrainians can
Added to all these problems is the disappearance of the Russian market from real estate agencies. “Three acquisitions were halted because my Russian clients were unable to release the funds,” explains Alban Lelup of Masséna Immobilier in Nice. Even if this is not my main clientele, these are still good real estate deals from 500,000 to 800,000 euros. On the Côte d’Azur, these clients have been at the forefront for several years. “A category that can cost up to 4 million euros for real estate.
This is one of the goals of Laurent Merengone from the real estate agency Gubernatis. He then remarked that “many Russians want to rent out their villa when they bought it not so long ago. Others are even forced to sell, thinking they are waiting for new restrictions or simply because they can no longer come here. Hence the importance of diversifying your clientele. I saw an email from a luxury agency that mainly caters to Russian speakers who are now offering deals at 20% off. »
And one client is chasing another. “I just signed a 3-room apartment on the golden square in Nice for 700,000 euros with a Ukrainian client,” the realtor continues. I also have rental requests this summer from CSP+. Wealthy people tend to stay on the Cote d’Azur. This is a new phenomenon that I did not expect at all. »
But for Ukrainians with less means, “it’s harder,” says Moise Vergeot, president of the Orpi Côte d’Azur group. “Finding guarantors for donors is not easy, there are no tax revenues. Then you need to try to have savings. It’s a difficult situation on this side as well. »